Twenty-three is the number. Hong Kong's Securities and Futures Commission reported yesterday that its annual survey of the local asset management industry revealed AUM growth of 23%, to a total of HK$3,618 billion ($465 billion) as of end-2004. That matches the pace reported earlier by the Monetary Authority of Singapore, which showed total assets managed in the Lion City also grew by 23% in 2004, to S$572.6 billion ($343 billion).

Although there are differences between the type of business being won in the two cities, the biggest difference is in terms of staff. While Singapore remains a hub for money management, Hong Kong is clearly the centre for marketing. Although this makes sense because of geography, the numbers show just how striking the divide between North Asia and Southeast Asia has become.

The MAS reported that the number of "investment professionals" grew by 15% to 1,135 people last year. The SFC says only 5% of Hong Kong's employees engaged in fund management activities are analysts or portfolio managers, or 852 people. But the SFC boasts a total of 17,039 people in the local industry, up 12% from 2003. Of these, 82% are involved in sales and marketing, with another 6% in fund administration. Unfortunately the MAS does not release total industry employment figures in its summary, so we are left to speculate that this may be because the headline number is not worth trumpeting. The numbers also show that Hong Kong's portfolio managers are running bigger books of business, although Singapore has more of them.

Both cities source most of their AUM from abroad (63% for Hong Kong, 70% for Singapore), and both remain platforms for investing into Asia. Of the $465 billion mandated to Hong Kong, $137 billion of that was actually managed in Hong Kong, versus being farmed out to firms' other offices, and of that amount, 73% was invested in Asia, mainly in Hong Kong and China.

But while Singapore remains a destination for managing Asia assets, it is actually growing as a location to manage global assets: the MAS reports that Europe and the US now account for 24% of investments managed from Singapore, and are growing faster than Asia mandates.

Singapore is also more oriented toward fixed income and structured products. While 68% of the AUM managed in Hong Kong was invested in equities, only 44% of Singapore-managed assets were. Bonds now account for 22% of Singapore-managed assets, versus about 19% in Hong Kong. Where Hong Kong is focused on equities, the MAS reports 11% invested in alternatives, 6% in commodities, derivatives and foreign exchange products, and 16% in cash and money market funds.

The SFC's survey is much more detailed than the summary provided by the MAS. Other highlights from it include the important role of guaranteed funds in 2004. Of the 217 funds authorized by the SFC last year, 81 were guaranteed funds, bringing the total of these to 295 funds with a total NAV of $19 billion. Demand for these continues, with the SFC noting that the total number grew to 310 by June, 2005.

The SFC also touted the addition of two new exchange-traded funds, including the first to track an A-share index (launched by BGI) and five hedge funds. The SFC notes it established a team in October to deal with hedge fund managers' applications, and says it has received 24 applications and approved 16. Industry players still find Singapore a more congenial regulatory environment for launching authorized hedge funds, but the attractions of North Asian markets have certainly made Hong Kong appealing to non-SFC authorized funds.

Lastly, the SFC says it has so far authorized more than 75% of the applications it has received so far for funds that have not significantly changed their investment policies to be recognized as Ucits-3 funds, allowing fund managers with Europe-domiciled products to update their rules to accommodate the European Union's new Ucits code.

Nowhere in either regulator's survey is a comment about regional cooperation or establishing an "Asian passport" system to allow a fund registered in one domain to be marketed in another - which is what the funds industry really wants, but isn't going to get.